US:Microsoft pares down MSN payroll

Stephen Elop CEO of Nokia, left, with CEO of Microsoft Steve Ballmer... Microsoft is in the midst of buying Nokia’s devices and services business for ($US7.2 billion) in an effort to expand its share of the smartphone market.
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MSN is cutting a substantial number of its freelancers, contractors and vendors — all apparently in a move away from providing original content as Microsoft focuses on becoming a devices and services company.

Notices were given last week about the cuts, effective by the end of September.

Microsoft declined to say how many people will lose their jobs.

But, last week it said the cuts were part of the larger companywide reorganisation announced in July intended to transform the software company into one that provides devices and services.

Some who have been affected estimated that at least 100 people working for the MSN Entertainment channel have been cut. Other cuts reportedly range across MSN's channels, including News and Money.

"Bloggers, freelance writers, producers, as well as editors are being let go left and right," said one person affected by the cuts.

Full-time
Microsoft
employees do not appear to be affected. But MSN has many contractors, vendors and freelancers who provide, edit or produce much of the news portal's content.

Microsoft declined to say how many full-time employees, and how many contractors, work at MSN.

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The reduction comes about a year after Microsoft said it was boosting its support for news after the company's breakup with NBC over their MSNBC.com joint venture.

Applications and Services

MSN gets about 480 million unique visitors worldwide a month — about 115 million of them in the US — and had been in the same perennially money-losing Online Services division as Bing, Microsoft's search engine. That division lost $US1.28 billion in the fiscal year ended June 30.

Under the sweeping reorganisation, MSN and Bing are still in the same division — now called Applications and Services — along with Office and Skype. The division is charged with producing apps and services related to productivity, communication and search.

In recent months, the company has seemed to be lavishing far more attention on Bing than MSN, touting it as a platform for developers and as a way to power searches across a range of devices and services with the upcoming Windows 8.1.

The company also released Bing Apps, a collection of news, weather, sports and other apps, for Windows 8 and Windows Phone 8.

MSN and Bing Apps merged in July into what's now called the Apps, Media and Publishing group, headed by corporate vice president Brian MacDonald, who comes from an engineering background and has extensive experience working in Bing and with applications.

In an email to The Seattle Times last week, MacDonald said there are "lots of increased investments going on. We are increasing the full-time staffing and permanent spend by converting some vendor dollars".

"We are looking to accelerate our investments. Total dollars spent in the Puget Sound area is increasing on MSN and the Bing apps. This (the cuts) is a line item budget shift but absolutely not a spend reduction for cost savings," he wrote.

Some people affected by the cuts questioned whether the full-time hiring would indeed happen or, if so, whether any of the contractors losing their positions would be hired back.

"The vibe at MSN is that another round of cuts is coming," one person said.

The people who spoke with The Seattle Times did so on condition of anonymity because they had signed nondisclosure agreements or they did not want to endanger future job opportunities.

Others said they had seen some contract positions turned into full-time ones — but that those positions involve work such as converting news from wire services into the MSN template, not original work.

"When people are being cut, they're being told that there will be no original content (on MSN) or next to none," said another person affected by the cuts.

Given the company's new direction, some speculated that the focus of MacDonald's whole group would now be on creating apps.

Those apps — such as a news app or real estate app — would then provide content from partners such as wire services or newspapers.

Microsoft declined to comment on the speculation, on MSN's direction, and on whether more cuts may be coming.